Should Columbus Pull the Lever for the Levy?

If all goes as planned, Columbus City Schools Superintendent Gene Harris will have a levy on city voters' ballots in November. She has presented a levy proposal to a citizen advisory committee, who is currently reviewing her proposal. According to Columbus Dispatch reports, the levy could increase taxes on residential property owners by up to an additional 15.56 mills. This would translate to an additional $545 tax per every $100,000 of a home’s market value. (The details of her proposal are not posted on the Columbus City Schools’ website.) If the advisory committee recommends the levy and voters approve the tax, Harris’ tax increase will hit the wallets of property owners starting in 2013.

To educate Columbus’ citizens who may soon decide on whether to raise taxes, KidsOhio recently issued an excellent fact sheet about the district. In particular, they do well in comparing the district‘s student achievement and finances for three school years: 2003-04, 2007-08, and 2010-11. Some facts to consider from their report include: The district

  • lost 12,000 or 19 percent of its students, from 2004 to 2011
  • cut 1,670 jobs or 19 percent of its labor force, from 2004 to 2012
  • spent $15,000 per pupil in 2010-11, the third highest per pupil expenditure in Franklin County
  • “passed through” $97 million to charters in 2012, an increase from $64 million in 2008
  • projects a $71 million shortfall in its cash position by FY 2015, despite having a $112 million cash surplus balance in FY 2012.

To add onto KidsOhio’s “just the facts” piece, we’ll contribute two additional pieces of information about the district, taken from its financial audits, as food for thought: The district

  • increased millage rates from $59.18 per $1,000 of assessed (taxable) value in 2004, to $67.65 in 2008, and to $75.50 in 2011.
  • receives a substantial proportion of its overall revenue from local sources relative what other districts receive (with the exception of Cincinnati). Consider the table below, which shows the percentage of the district’s revenue generated by local taxes:
 

2010-11

2007-08

2003-04

Akron City

35%

39%

36%

Cincinnati City

54%

55%

55%

Cleveland City

25%

28%

28%

Columbus City

54%

52%

51%

Dayton City

32%

37%

38%

From these two added points, it seems that Columbus’ property owners are doing their fair share of lifting when it comes to funding their local public school. Columbus’ millage rate has steadily increased during the past decade, and compared to many of Ohio’s other metropolitan districts, Columbus generates considerably more of its revenue locally.

These facts, taken together, should give voters some pause before uncritically pulling the lever in favor of the levy—again, if the levy proposal gets that far. Given the district’s shrinking size (in terms of students and workforce), their relatively high per pupil expenditures, and the already-sizable local effort to fund the district, does an increased tax truly make sense for Columbus’ residents? Or does the district need to present more creative options about how to solve its (projected) budget woes—either on the revenue or expenditure side?[1]

True, the district has been leaking some local revenue due to the tangible property tax repeal (it made up about 10% of its tax base in 2004); but could it reach out to businesses who benefitted from the repeal—maybe even (gasp!) its hefty tax-exempt population—to help it generate lost resources? Does it need to right-size its expenditures even more? Consolidate or merge even more buildings? (Yes, it has closed 33 buildings since 2004.) The superintendent’s advisory committee, along with Columbus’ residents, should ask these questions and more before another tax increase is placed on their shoulders.  


[1] “Projected” budget woes in the sense that currently the district has relatively healthy finances. Fitch rates them AAA (“stable”) and its financial position seems strong—in 2011, it had a 2.49 current assets to current liabilities ratio, an improvement compared to 2004 when the ratio was 1.77 current assets to current liabilities. Additionally, in FY 2010-11, the district operated at a $31 million surplus. Of concern for the district may be its growing long-term liabilities on their balance sheet; they have risen from $356 million in 2004 to $585 million in 2011.

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